By: Longoria H.B. No. 3448
A BILL TO BE ENTITLED
AN ACT
relating to single premium term life insurance offered in
connection with certain consumer loans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter I, Chapter 342, Finance Code, is
amended by adding Section 342.4022 to read as follows:
Sec. 342.4022. SINGLE PREMIUM TERM LIFE INSURANCE. (a) On
a loan made under this chapter that is subject to Subchapter E, a
lender:
(1) may, through a properly licensed insurance agent,
offer a borrower single premium term life insurance;
(2) may not require the borrower to accept the
insurance described by Subdivision (1);
(3) shall provide the borrower with the option to pay
the insurance premium from the borrower's own funds or to pay the
premium with a portion of the loan proceeds; and
(4) before completing the transaction, shall provide
to and review with the borrower a disclosure that specifies:
(A) the total dollar amount of the term life
insurance premium, and a comparison between:
(i) the amount of the payment due on the
loan with the additional purchase of the term life insurance
policy; and
(ii) the amount of the payment due on the
loan without the additional purchase of the term life insurance
policy; and
(B) if there is any shared interest or ownership,
including any common third-party ownership, between the insurance
company and the lender, then the lender must disclose the fact of
the shared interest or ownership.
(b) The finance commission by rule shall prescribe the form
and the content of the disclosures required by Subsection (a)(4).
SECTION 2. Section 342.407, Finance Code, is amended to
read as follows:
Sec. 342.407. REQUIREMENTS FOR INCLUDING INSURANCE CHARGE
IN CONTRACT. Insurance for which a charge is included in a loan
contract must be written:
(1) at lawful rates;
(2) in accordance with the Insurance Code; [and]
(3) by a company authorized to do business in this
state; and
(4) through an insurance agent licensed in accordance
with the Insurance Code, if the included charge is offered under
Section 342.4022 of this code.
SECTION 3. Section 342.412, Finance Code, is amended to
read as follows:
Sec. 342.412. ACTION UNDER SUBCHAPTER NOT SALE OF
INSURANCE. Except for the sale of a single premium term life
insurance policy to a borrower under Section 342.4022, arranging
[Arranging] for insurance or collecting an identifiable charge as
authorized by this subchapter is not a sale of insurance.
SECTION 4. Section 342.4022, Finance Code, as added by this
Act, applies only to an insurance policy that is delivered, issued
for delivery, or renewed on or after January 1, 2018. A policy
delivered, issued for delivery, or renewed before January 1, 2018,
is governed by the law as it existed immediately before the
effective date of this Act, and the former law is continued in
effect for that purpose.
SECTION 5. This Act takes effect January 1, 2018.